DPP CHAIRMAN YU SHYI-KUN ON DOMESTIC POLITICS,

C O N F I D E N T I A L SECTION 01 OF 02 TAIPEI 003634 SIPDIS SIPDIS E.O. 12958: DECL: 10/19/2031 TAGS: PREL TW SUBJECT: DPP CHAIRMAN YU SHYI-KUN ON DOMESTIC POLITICS, CONSTITUTIONAL REFORM, AND NORTH KOREA Classified By: AIT Director Stephen M. Young, Reason 1.4 (b/d) ¶1. (C) Summary: Democratic Progressive Party (DPP) Chairman Yu Shyi-kun predicted to the Director on October 19 that the anti-President Chen movement will gradually die out unless the forthcoming prosecutor's report is very damaging to the President. Yu observed that DPP mayoral candidate Chen Chu is closing the gap with her Kuomintang (KMT) opponent in Kaohsiung, while the recent pan-Blue divisions in Taipei have created an opening for DPP candidate Frank Hsieh. The Director stressed the importance of keeping sovereignty issues out of constitutional reform initiatives to avoid damaging U.S.-Taiwan relations. Yu took the Director's point. End Summary. DPP Supports US Position -------------- ¶2. (C) In a meeting with the Director on October 19, DPP Chairman Yu Shyi-kun expressed strong support for the U.S. and international response to the North Korean nuclear test. He pointed out that the DPP had issued a resolution on the issue. Yu also agreed with the Director on the key importance of enforcing export control restrictions on trade with North Korea. "Depose Chen" Movement -------------- ¶3. (C) Turning to domestic politics, Yu suggested that the "Depose Chen" movement led by former DPP Chairman Shih Ming-te is dying down. The movement is riven by internal bickering and several key leaders have recently departed, leaving the organization like a "crab without legs." However, Yu pointed out, the movement will receive a boost if the prosecutor's report on the Presidential Office special state fund, which may come out in late October or early November, is damaging to President Chen. Prospects for No-confidence motion and a Wang Premiership -------------- -------------- ¶4. (C) Yu predicted that a negative prosecutor's report could also unify the opposition pan-Blue camp in the Legislative Yuan behind another recall effort or a no-confidence motion against Premier Su Tseng-chang. However, the majority of Kuomintang legislators would ultimately resist proposals for a no confidence vote out of fear of losing their seats if President Chen were to dissolve the LY and call a snap election. (Note: Taiwan constitutional reforms passed last year will halve the number of legislators from 225 to 113. The next regular LY election is scheduled for December 2007; a snap election would force the cuts much sooner. End Note.) ¶5. (C) Yu dismissed rumors that (KMT) Legislative Yuan Speaker Wang Jin-pyng stood a chance of replacing Su Tseng-chang as Premier. At most, Yu said, Wang could only SIPDIS cobble together support from about 60 legislators (40 from the smaller Taiwan Solidarity Union, People First Party, and independents, plus another 20 from the KMT),far from a majority. KMT Chairman Ma is unlikely to agree to such a move, unless President Chen allows the KMT to form the cabinet, and the DPP will not support Wang becoming Premier, Yu said. Mayoral Races -------------- ¶6. (C) Looking at the Taipei and Kaohsiung Mayoral races, Yu suggested that pan-Blue divisions in Taipei and the unpopularity of the "Depose Chen" movement in the south are improving election chances for DPP candidates. With DPP internal polls for KMT Chairman and Taipei Mayor Ma Ying-jeou slipping to under 50 percent, Yu suggested that KMT legislators and others are increasingly less willing to listen to Ma, who is gaining a reputation for weak leadership. TAIPEI 00003634 002 OF 002 ¶7. (C) In Taipei, Yu predicted that KMT candidate Hau Long-bin, People First Party (PFP) Chairman James Soong and independent Lee Ao may split the pan-Blue vote, giving the DPP a chance of winning in what has traditionally been a Blue stronghold. Although DPP candidate Frank Hsieh is now trailing the KMT's Hau Lung-in by about 15 points in some polls, Yu pointed out that Hsieh can expect to win about 40 percent of the overall votes, which could give him a chance to squeak by if Soong and Lee Ao siphon off enough Blue votes from Hau. (Note: As of October 25, internal DPP polls showed Hau leading Hsieh by 12 percentage points. End Note) ¶8. (C) In Kaohsiung, Yu noted that DPP candidate Chen Chu's numbers have been rising while those of KMT challenger Huang Chun-ying have been dropping. DPP internal polls show the race is now close with Chen Chu trailing by only 4 per cent. Yu attributed Chen Chu's ability to close the gap to better campaigning, DPP unity, and the fact that the excesses of the "Depose Chen" campaign have unified pan-Green supporters in the south. The 3-6 percent support for Taiwan Solidarity Union candidate Lo Chih-ming could negatively affect Chen Chu's chances, but Yu expects most pro-Green voters will in the end abandon the TSU to give Chen a last minute boost to victory. Yu also said that President Chen will wait for the prosecutor's report, and if the report clears him, then consider making campaign appearances in Kaohsiung. Constitutional Reform -------------- ¶9. (C) The Director stressed the sensitivity in Washington of the constitutional reform issue and the importance of President Chen keeping his commitments not to touch sovereignty issues. Washington wants the cross-Strait situation to remain quiet. It is not useful to push changes that the LY will not approve, the Director pointed out. What the LY needs to focus on now is passing the defense budget, and the government also has much important work to do on economic, national security and other issues. If the DPP pushes sovereignty-related constitutional changes, that will damage U.S.-Taiwan relations, the Director stressed. Chairman Yu responded that he "understood" the Director's message on the constitution. Comment -------------- ¶10. (C) Despite Yu's relative optimism, the DPP is fighting a distinctly uphill battle in Taipei; a Frank Hsieh victory would be a major upset. The race in Kaohsiung is a toss-up, the edge going to the DPP, but the prosecutor's report on President Chen could have a significant bearing on the election. A KMT or DPP sweep in Taipei and Kaohsiung would be very bad news for the other party, while each party could live with a split decision. Yu clearly understood the Director's message on the sensitivity of the constitutional issue, but we will have to continue monitoring this issue closely to ensure that Taiwan's leaders resist urges to promote independence themes for political benefit. YOUNG